Pre-market Report : 06.07.2009

[B. Karthick]

It is budget time, and the winners are.....


Stock market indices are expected to be volatile on Monday, as
investors anxiously await the budget announcement from FM this
morning. We expect the market to close the day in the positive
territory as the the budget is likely to be pro- business. Expect the
Sensex to trade in a wide range between 14,600 and 15,300 on a day of
high volatility.

The government may also reiterate plans to raise the foreign direct
investment ceiling in insurance companies to 49 percent from 26
percent . This might benefit the stock of Max India (Rs 206). There is
another proposal to allow overseas universities to operate in India,
which might open opportunities forNIIT (Rs70) and Aptech (Rs 175).

The government is expected to boost infrastructure spending and make
it easier to get housing loans. This move could benefit companies like
GMR Infra, IDFC and HDFC. Mr. Mukherjee is also expected to announce
plans of increase in the healthcare expenditure and promote rural
healthcare benefiting companies like Fortis Healthcare. Banks might
benefit from financial reforms and agri related businesses like
Escorts, GSFC and RCF might join the beneficiaries list.

Textile and export oriented Jewellery and leather stocks are the ones
to watch out for, as the government might announce sops for these
sectors which have been in trouble for the past few years due to
deteriorating global economy. Alok Ind, Arvind Mills, Gitanjali Gems,
Evinix Accessories and Crew Bos products are the stocks to benefit
from these moves.